NZD/USD falls to a low of zero.6791 after breaking beneath the 200-hour MA
Worth now appears in the direction of a check of yesterday’s low of zero.6782 and if that breaks it opens up a transfer again in the direction of the swing area round zero.6750 for starters. It has been a little bit of a tough day for each the aussie and kiwi as each currencies are weighed down towards the remainder of the most important bloc.
There is not very a lot to go on for the drop right here within the kiwi and aussie, however some merchants are citing a drop in short-term yields because the trigger. Taking a look at that, there’s a little bit of a decline there however nothing actually substantial. Nevertheless, do take observe that at present could be very a lot missing in liquidity so there’s that.
From a technical perspective although, NZD/USD is continuous its decline after failing to maneuver above the topside trendline resistance in a single day after which breaking again beneath the 100-hour MA (crimson line). Now that value falls again beneath the 200-hour MA (blue line) as effectively, the near-term bias turns extra bearish.
Trying on the each day chart, patrons have been unable to discover a approach to crack above the 200-day MA (blue line) within the latest upside transfer and now the danger right here is that the each day shut will firmly fall again beneath the 38.2 retracement stage @ zero.6796. That can pave the way in which for a transfer again decrease in the direction of the 28 August excessive @ zero.6727 earlier than the swing area round zero.6690-00 comes into play. Thereafter, the 100-day MA (crimson line) may also be one other key help stage to be careful for.
I am by no means a fan of breakout strikes occurring throughout skinny liquidity time however the chart right here is obvious that sellers are slowly taking again management after an try at a key break to the upside (200-day MA) has failed. Therein, the risk-reward play favours shorts extra for my part however one can argue that the greenback is headed for troubling occasions with the Fed seeking to pause its tightening cycle.
Therefore, I would not count on a run to the draw back again in the direction of the 12 months’s lows however you possibly can at all times decide respectable pips following the move and the technical breaks above.